Methods and approaches for Linking Smallholder farmers to Markets

1. Methods and approaches for Linking Smallholder farmers to Markets Elly Kaganzi Technical Advisor of Market Engagement and Economic Development CARE- USA ekaganzi@care.org

2. Background • From the late 80 and early 90s smallholder farmers started to face substantial barriers to achieving improved livelihoods as commodity prices declined, public sector reform reduced assistance and natural resources became scarcer. This coupled with market integration led to increased competition. • Research into way through which competitiveness of smallholder farmers would be enhanced began. CIAT among fore front agencies looking at ways of integrating smallholder farmers in competitive value chains

3. Strategies considered • Increasing competitiveness of market chains • Adding value • Diversification (products and services) • Better organization • New contractual arrangements • Links to financial services

4. Clients and Beneficiaries • Clients • National / regional researchers • Service providers, NGOs, CBOs, • Universities • Private sector entrepreneurs / farmer associations, women’s groups • Beneficiaries • Poor smallholder farmers • Rural traders • Business service providers • Processors • Consumers

5. The Methods • Have been developed over the past 12 years, they have been well tested • Are being used in Central America, Andean America, South East Asia and Eastern and Southern Africa, and West Africa through Learning alliances. • Taken up and scaled out by National, Regional and International organisations • CRS, CARE, Africare, World Vision, National Government agencies.

6. New methodologies for Value Chain analysis and development for small-scale producers

7. Key Features of Rural Agro-enterprise development Process • Area based • Participatory • Market led • Thinking “outside the farm” • Scaleable • Seeking continuous innovation • Building on local skills and empowering communities

8. Entry Points for the Process • Competence of Service provider • Organisation of farmers • Wealth of groups • Market access and engagement • Product types • Availability and access to services

9. Visioning for the future

10. Commercial (and social) interests Input Suppliers Consumers at Formal Market Value Chain Operators Retailers Wholesalers Farmers(Formal and informal groups) Suppliers Transporters Processing Factories / Value Addition Consumers at Informal Market Retailers Wholesalers Intra-chain / Inter-actor support, coordination, management. Improving efficiency and transparency of transactions Interventions, business support Support of development goals and public interests, payment Research Bodies Extension NGOs BDS Providers State Bodies Microfinance Institutions Banks Value Chain Supporters / Service Providers Non-financial Services Financial Services National / International Enabling Environment Working group for Agro-enterprise within VC framework)

11. The marketing facilitator “A Market visit” Market Opportunity Identification is a process of generating knowledge and making decisions based on Demand. Taking clients to the market is often a real “eye opener”

12. Mapping out the Market Chain Participatory approaches increase the level of farmer ownership in the process and enables producers and Service providers to develop new types of relationships, FACILITATION

13. Service Providers discussing options for a new Business with farmers and Chain Actors Stockists Traders Partner, service provider Farmers

14. Scaling up

15. 6 months Apply, monitor and follow-up 8 months Apply, monitor and follow-up 5 days 6months L L L Agroenterprise design and development of action plans Business Development Services and their assessment Evaluating and selecting enterprise alternatives Apply, monitor and follow-up 5 days Interest group formation and market opportunity identification 5 days Monitoring and evaluation 5 days The “Learning Alliance™” An incremental learning process

16. Service Provider Farmer Profiling Small-scale farmers organised & supplying a specialised value chain Link supplier groups To specialist service providers Specialist marketing service providers Small-scale farmers organised and adding value to selected products Increase Competitiveness in input And output markets Link activities to finance services Service providers With strong Marketing experience Small-scale farmers organised to sell produce collectively Diversify products strengthen business skills Initiate savings records Link to MF Service providers With more Marketing experience Individual Small-scale farmers Sell surplus product into the market Organise farmers Select existing product Produce for the Market. Evaluate Service providers With limited Marketing experience

17. Development impact • Increased farm income • Ground nut producers in Eastern Uganda. Nnegotiations led to a 16% price premium due to higher quality of nutsn and selling to a known buyer. • Cut flowers in Cauca, Colombia. 24% price increase for producers for flowers sorted, graded and packed to customers needs. • In Tanzania, 15 NGOS capacity in market development build in an IFAD program . Farmer income increases 15-25% • Potato farmers in Kabale, Uganda. Sold 2000 Mt of potatoes for $300,000, in past 8 years. • In Rwanda, over 15,000 families increased their income through integration in vegetable, high value chillies, baskets • Scaling out to the Development world • CRS global Agro-enterprise development initiatives • CAREs pathways women's empowerment program ( 6 countries 14 value chains • Empowered communities and farmers (est. 200,000 farm families) • Through reference/pilot sites and Learning alliance • More effective rural business development service providers • Partners in reference/pilot sites and in Learning Alliance projects • Rwanda, Ethiopia, Burundi, Malawi and Zambia

18. Conclusions • Productivity alone has not succeeded in reducing rural poverty. A broader strategy is needed. • The global agrifood system is becoming less remunerative for primary producers. • Farmers need to be competitive and better organised to make farming pay • Farmers need to find ways of adding value to their goods and accessing new markets. • We Need to develop new ways of strengthening skills to enable rural innovation so that our beneficiaries can find and manage markets, access value adding technologies, achieve improved links with other actors and organize effective support services are possible ways forward.